New car sales stuck in second gear as semiconductor shortage continues
- New car sales slumped to an eight-year low in August
- Covid-related semiconductor shortages continue to stall vehicle production lines across the globe
- Production problems predicted to continue until 2024
August is traditionally a quiet month for new car sales in the UK, but year-on-year figures from the Society of Motor Manufacturer and Traders (SMMT) show new registrations were down by 22 per cent in August. The monthly performance was the weakest for the month since 2013, and down 7.6 per cent against the average recorded over the past decade.
A global shortage of semiconductors is being blamed for supply chain problems. This has resulted in long delays for some of the UK’s favourite new cars, with Ford Fiesta buyers being told they will have to wait up to six months for certain models.
A spokesperson for Ford said: “The global semiconductor chip shortage has affected almost all OEM’s around the world and Ford is no exception. Current Ford products have a rich selection of standard driver assistance technologies, however, these are highly dependent on semiconductors.”
Data from the SMMT show that new car registrations remain up by 20 per cent on 2020 when showrooms and factories were forced to close for long periods, with 1,101,302 new cars sold so far in 2021. However, compared to the 10-year average, total registrations are 25 per cent lower than expected for January to August.
Electric car demand remains strong
There was some good news for the electric car market with demand up 32 per cent in the same month in 2020. Electric cars accounted for 10.9 per cent of the new car market in August, while petrol and diesel took for a respective 43.3 per cent and 7.5 per cent. Plug-in hybrid and 'self-charging' hybrid cars accounted for 19.2 per cent of the market, while mild hybrid petrol and diesel cars completed the remaining share of 19.1 per cent.
Why are new cars being delayed in the UK?
The Covid pandemic has disrupted the supply chain for new vehicles and resulted in long waiting times for car buyers. However, the problem is particularly bad when it comes to semiconductors, which power many of the onboard systems in modern vehicles. The US, EU and China are looking to increase the supply of semiconductors, but at the moment demand is outstripping supply.
Why is a semiconductor shortage affecting the delivery of new cars?
Like any piece of technology, modern cars are heavily reliant on semiconductors. These super chips power many of the onboard safety systems. They are also required to power the touchscreen infotainment and digital instrument displays, which have become the latest 'must-have' gadgets in new cars.
How long will I have to wait for a factory-built new car?
It depends on who you speak to. Ford has admitted that some variants of the Fiesta are facing a six-month delay. But said some lower-spec models can be supplied in a much shorter time frame. Vauxhall claims buyers will wait no longer than nine weeks for a new Corsa, while Volkswagen Group has refused to put a timeframe on how long buyers will be asked to wait for a new car.
According to the feedback we've received from HonestJohn.co.uk readers via ASK, a waiting time of four to six months is not uncommon.
When will new car deliveries get back to normal?
The shortage of semiconductors is a long term problem, experts say. Research by heycar has said the disruption could continue up to 2024. Bosch, one of the world's largest automotive part suppliers, has reportedly told CNBC that the semiconductors chain is "no longer fit for purpose".
Could we see new cars with less tech in future?
Yes and no. Some carmakers are already launching lower spec cars with analogue dials and less touchscreen tech. However, according to Karen Hilton, Chief Commercial Officer at heycar, carmakers will look to streamline production and take inspiration from Silicon Valley companies like Apple.
“To streamline manufacturing - they long ago abandoned offering customers the ability to customise products in anything other than the most minor way," says Hilton.
“And so will it be with cars. Gone will be the ability to endlessly modify a vehicle down to the tiniest bespoke detail. In its place will be models and trims with specs that are fixed and a reduced number of options to add on top.”
“Ultimately car-buyers will still get a product that delights them - but one, crucially, that can be produced much more quickly."
Don1988 on 10 September 2021
By the time the semi- conductor mess is sorted it it won't be worth buying a new ICE car anyway due to the (forced) switch to electricGTD 184 on 14 December 2021
I have no doubt thatthis semi conductor shortage is being used as an excuse to create an artificial market of high demand, high car prices and great profits!Most manufacturers are reporting lower car deliveries with higher profits as manufacturers are prioritisong higher specification models which enivitable result in higher ticket prices. Because of the aforementioned manufacturers are in no rush to see an end to the so called semi conductor shortage as profits for them have never been so good!
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